By Shivangi Acharya and Manoj Kumar
NEW DELHI (Reuters) -India's goods and services exports likely rose 5.4% year-on-year to $65.47 billion in June, driven by a pick-up in orders that could push total exports to $800 billion in the current fiscal year ending in March 2025, the trade secretary said on Monday.
Merchandise imports in Asia's third-largest economy rose 5% to $56.18 billion in the same month, reflecting a pick-up in domestic demand for industrial machinery and gold imports.
Merchandise exports were up 2.6% on year to $35.2 billion in June.
The goods trade deficit narrowed to $20.98 billion in June from $23.78 billion in May. Analysts had expected a deficit of $21.5 billion, according to a Reuters poll.
"India’s total exports in the first quarter of 2024/25 have crossed $200 billion and, if this trend continues, we hope this fiscal year’s exports cross $800 billion,” said Trade Secretary Sunil Barthwal, releasing the monthly trade figures.
He said growth in merchandise exports was driven by engineering, electronic goods and pharmaceuticals, and that the April-June quarter posted a record high in exports.
India's goods and services exports rose to $778.2 billion in fiscal 2024, and the government expects total exports could touch $1 trillion by 2030.
The government also estimated services exports in June at $30.27 billion and imports at $17.29 billion, compared with $29.76 billion and $16.74 billion in May.
India's central bank releases the services trade figures after a one-month lag, while the commerce ministry releases its estimates a fortnight earlier, along with merchandise trade data.
INCENTIVES FOR EXPORTERS
Finance Minister Nirmala Sitharaman, who will present the annual budget on July 23, could announce tax incentives to boost exports of items such as farm products, pharmaceutical products, and digital services among others, exporters said.
India's economy, which grew 8.2% in fiscal 2024 - the fastest pace among major economies - is estimated to grow close to 7% in fiscal 2025.
The country has made several moves in the manufacturing sector, such as offering subsidies of 4%-6% as production-linked incentives to boost exports of electronic goods, pharmaceuticals and other products and also exploring new market destinations in the Middle East and Africa regions.
It also plans to send another trade delegation to Russia to discuss trade prospects after Prime Minister Narendra Modi's visit, besides expanding trade through bilateral currencies, Barthwal said, without specifying details about the delegation.
Meanwhile, India's trade deficit with China rose to nearly $34 billion in the first five months of 2024 as imports of electronic components, computer hardware, chemicals and machinery surged, government data showed.
In 2023, the trade deficit with China stood at over $83 billion, raising concerns among policymakers.